Iran war fallout: oil prices surge, supply remains tight

Even a ceasefire in the Middle East won't immediately ease the global oil crunch. Damage to critical energy infrastructure and logistical bottlenecks are poised to keep prices elevated for months, according to a new analysis from Eurasia Group. The situation, already tense, is pushing gasoline prices to levels not seen since 2022.

Refineries and shipping face months of delays

Henning Gloystein, managing director at Eurasia Group, highlighted the significant challenges ahead. While a cessation of hostilities would allow for the reopening of the Strait of Hormuz, he estimates repairs to oil refineries and other energy infrastructure in the Persian Gulf will take several months. Shipping companies, facing their own hurdles, are looking at at least two months to resume normal operations in the region. This isn't a simple return to pre-war conditions; it's a complex recovery process.

The Strait of Hormuz, a vital artery for global oil transport, remains severely restricted. A United Nations report revealed a dramatic drop in ship transits—from roughly 130 per day in February to a mere six in March—underscoring the scale of the disruption. The visual evidence is stark: a fleet of approximately 70 large, empty crude oil tankers anchored off the coasts of Singapore and Malaysia. These vessels, capable of holding at least 100 million barrels of crude, are essentially stranded, awaiting the resumption of flows from the Gulf region.

The economics are brutal. The typical journey from Singapore to the Gulf takes four weeks, meaning these tankers won't be delivering Middle Eastern crude to Asian refineries for another eight weeks, even after hostilities cease. The timing couldn’t be worse, as global demand remains robust.

President Trump, in a Monday press conference, acknowledged ongoing negotiations with iran, stating they were proceeding